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EU Sanctions Shake Diesel Markets: What It Means for Prices & Supply Chains

Gustian Farrow
Gustian Farrow

Head of StoneX TV • Content Channels

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EU Sanctions Shake Diesel Markets: What It Means for Prices & Supply Chains

Alex Hodes, StoneX Director of Energy Market Strategy, examines how EU sanctions on India’s Niara Energy refinery are reshaping diesel prices and supply chains.

Key Takeaways

  • EU sanctions removed fifteen percent of diesel imports overnight
  • Diesel and gas oil prices have jumped amid tight global supply
  • Europe must pay a premium to attract alternative suppliers

Supply Disruption Triggers Volatility

The recent EU sanctions on India’s Niara Energy refinery have removed approximately fifteen percent of European diesel imports overnight, sending prices higher and creating significant market volatility. Hodes comments, "This Indian refiner has been supplying about 400 to 500,000 barrels per day of diesel to the EU. This accounts for almost 15% of diesel imports from the EU".

With alternative supplies needed from the Middle East, Asia, and the US, diesel prices have jumped from $2.40 to $2.47 per gallon, and gas oil has climbed from $700 to $725 per metric ton. The shift comes amid already tight global supply, with Europe now required to pay a premium to attract new barrels. “Europe has to basically have a higher premium to attract more barrels from the US, the Middle East and other Asian suppliers”. Market participants are watching closely as new refining capacity comes online later in the year, hoping for relief from elevated prices and supply constraints.

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---- Written by Gus Farrow

---- Expert: Alex Hodes, StoneX Director of Energy Market Strategy

 

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